I have lost count of the number of times I have met with potential clients who are convinced that they need this or that document or amendment or whatnot, but they at least have open minds, and by the end of the meeting they realize that what they actually need is completely different, and far superior to what they had in mind.
The most recent example went something like this (some details changed to protect the innocent): Neighbor told friend that Nina Whitehurst (that's me) is an estate planning attorney. Friend had been diagnosed with cancer and had a short time to live. Friend had an existing estate plan. Neighbor convinced friend to take her estate plan to me for review. Friend agreed that would be prudent but fully expected that it would be blessed and friend would incur nothing but the consultation fee and have peace of mind.
I reviewed friend's estate plan. There were serious flaws in the trust, not the least of which it was completing lacking a plan of distribution (meaning what happens to trust assets upon the settlor's death). I checked the pagination, numbering, etc,. several times, in near disbelief. I had never seen such a thing. Who creates a trust without a plan of distribution??!! But there it was. A simple amendment would theoretically fix that.
I then asked what was in the trust. Friend said a couple of bank accounts but not all of them. I advised friend to put all bank accounts in the trust, and the car too. Why spend all of that money on a trust-based estate plan, one of the purposes of which is to avoid probate, and then leave assets out, thus creating the need for probate?
Now suspicious that funding of the trust was not complete, I asked how her house was titled. She wasn't sure, so I looked it up. It wasn't in the trust! That was the most valuable asset in her estate, and it wasn't in the trust. How did her previous attorney let that happen?? I added to my notes that I would need to prepare a deed to transfer the house to the trust.
I asked about other things, like whether she had a power of attorney, living will, and the like. Nope. None of the above. More items added to the list. Things were changing rapidly with her health, and she was going to need to lean on her children quite a bit more to manage her financial affairs. And eventually they were probably going to need to make medical decisions for her. And I wanted her to provide them some written guidance with those difficult end-of-life decisions.
We were almost done with the review when I started running through the list of my usual other questions. You know, like the doctor asking you if you have experienced any of the following symptoms, and the list is long, and you say no to all of them as fast as he can rattle them off until he says that one word and you alert and say, yes, actually, I have experienced that, what does that mean?
She alerted when I asked her if any of her children is on government benefits. Yes, her daughter. I asked what kind. She wasn't sure, but she did think they were needs-based. I told her that her existing estate plan would dump a rather sizeable inheritance on the daughter and therefore disqualify the daughter for needs-based government benefits. The solution was a complete restatement of her trust in order to include a plan of distribution that included a third party special needs trust for the daughter, and fix a few other things along the way. Oh, and now we need to change the beneficiary of her life insurance to her trust. Leaving the daughter on as an outright beneficiary of the life insurance would no longer due, based upon this additional information.
This client started with an expectation that nothing needed to be done, that she had a trust, and that it was good, and that it was all she needed. In the end, however, she hired me to restate her trust, transfer her home to her trust, and create a slew of additional documents. It was essentially a brand new estate plan from scratch. She left with peace of mind that she dodged quite a few estate planning disasters. She passed not very long after, and I am now assisting her children with the administration of her estate. They are extremely grateful for the assistance I provided her mother, the daughter especially.
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